ATO interest charges now a penalty – denying deductions from 1 July 2025

With 1 July 2025 approaching, James Alsop and Aylin Harapoz explore the impact of new measures aimed at reducing collectable debt owed to the ATO.

The Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025 (Act), which amends the Income Tax Assessment Act 1997 (Cth) (ITAA 1997) to remove income tax deductions for general interest charges (GIC) and shortfall interest charges (SIC), passed both Houses of Parliament on 26 March 2025 and received Royal Assent on 27 March 2025. The new measures take effect from 1 July 2025. Background The Australian Government had previously announced a measure to deny any GIC and SIC incurred fro...

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Authors: James Alsop, Aylin Harapoz

Published Date: 20 May 2025

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